The Securities and Exchange Commission today charged the former Chairman and CEO of Schnitzer Steel Industries, Inc., with violating anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) by approving cash payments and other gifts to officials at Chinese government-owned steel mills to entice their business. Without admitting or denying the allegations, Robert W. Philip of Portland, Oregon agreed to pay more than $250,000 to settle the charges.

The Commission's complaint, filed in U.S. district court in Portland, Ore., alleges that from at least 1999 through 2004, Philip authorized payment of more than $200,000 in cash bribes and other gifts to managers at government-owned steel mills in China to induce them to purchase scrap metal from Portland-based Schnitzer. The Commission alleges that Schnitzer generated more than $96 million in revenue, and more than $6.2 million in profits, from sales to customers who had received the improper payments. The complaint further alleges that Philip authorized more than $1.7 million in payments to managers of privately owned steel mills in both China and South Korea, generating more than $500 million in additional revenue for the company.

The SEC's complaint alleges that Philip violated the anti-bribery, recordkeeping and internal controls provisions of the FCPA. Philip agreed to disgorge $169,863.79 in bonuses and pay $16,536.63 in prejudgment interest and a $75,000 civil penalty, and agreed to an order enjoining him from future violations of the FCPA.

In October 2006, Schnitzer paid $7.7 million in disgorgement to settle related charges by the Commission, and paid $7.5 million in penalties to settle related criminal charges brought by the U.S. Department of Justice.

The Commission acknowledges the assistance of the Department of Justice in its investigation.